Dollar Surge Makes Solar Projects Costlier in Uttarakhand, Regulator Proposes New Tariff Rates

Rising Dollar Hits Solar Project Costs in Uttarakhand

The depreciation of the Indian rupee against the US dollar has pushed up the cost of installing solar power plants in Uttarakhand. The Uttarakhand Electricity Regulatory Commission has noted that the exchange rate has reached Rs 92.28 per dollar, which is a key factor driving up capital costs for solar projects.

For solar PV projects starting on or after April 1, 2026, the capital cost has been fixed at Rs 285.32 lakh per megawatt, up from Rs 278.40 lakh per megawatt the previous year. While the government has reduced GST on solar equipment from 12 to 5 percent and import duty from 40 to 20 percent, these reductions have not fully offset the impact of the falling rupee.

New Tariff Rates Proposed for 2026-27

The Commission has released a draft for financial year 2026-27 with proposed tariff rates for various solar categories. Solar PV electricity rates have been reduced from Rs 4.10 to Rs 3.96 per unit. Canal bank solar rates have been revised from Rs 4.31 to Rs 4.09 per unit, while canal top solar will move from Rs 4.48 to Rs 4.26 per unit.

Rooftop solar rates under net metering remain unchanged at Rs 2.00 per unit. The public has been invited to submit suggestions on the draft by May 4.

Battery Storage Tariff Revised Downward

The Commission has also proposed a significant reduction in the tariff for Battery Energy Storage Systems (BESS). The tariff for electricity supplied by BESS to UPCL has been revised from Rs 3,96,000 per megawatt per month to Rs 2,54,583 per megawatt per month. The capital cost for BESS has been set at Rs 160 lakh per megawatt.

Subsidy Recipients to See Further Rate Cuts

The Commission has clarified that developers who receive financial subsidies or incentives from the central or state government will see their electricity rates reduced further in proportion to the benefit received. For example, if a project receives a 26 percent subsidy, its tariff will be reduced from Rs 3.96 to Rs 3.57 per unit.

Your Voice Matters

As Uttarakhand works to expand its renewable energy capacity, the rising cost of solar infrastructure remains a challenge. Do the proposed tariff changes reflect a fair balance between developer interests and consumer benefits? Share your thoughts in the comments section below. Stay tuned with Rangrove News for the latest updates on energy and development from Uttarakhand.